Volkswagen to supply parts for electric cars to Indian automaker Mahindra

German automotive group Volkswagen plans to supply Indian automaker Mahindra with components and batteries for electric cars. It is seeking to enter India’s emerging market for alternative-fuel vehicles, Reuters reported today. Mahindra also has a licensing agreement to use the Jawa brand.

Mahindra will equip some of its five planned electric sport utility vehicles (SUVs), which are due to launch in December, with components from Volkswagen’s MEB platform and the company’s unified battery cell. The supply agreement signed in 2022 will remain in force for several years and covers a total volume of approximately 50 gigawatt-hours (GWh), Mahindra said.

The modular MEB platform is the shared technological foundation for fully electric cars from the Volkswagen Group. Different models from different brands use the same technology. With its unified battery cell, the group aims to halve battery costs.

Interest among global automakers in India’s emerging electric vehicle market is growing. Demand for alternative-fuel cars in Europe and the United States has slowed after several years of rapid growth.

German luxury carmaker BMW expects electric cars to account for 25 percent of its total car sales in India by 2025, up from ten percent last year. American entrepreneur and Tesla chief Elon Musk said the automaker would likely “invest significantly” in India.

India’s electric vehicle market is growing, but remains small. Only 2.3 percent of cars sold in India last year were electric. The country still lacks the necessary infrastructure as well as government incentives.